Grappling with major government budget cuts, the FDA is seeking remedies to preserve programs of vital interest to pharma and device companies. Now that sequestration has arrived today, power brokers in the White House and Congress could hold the keys to keeping the agency on track.

As BioCentury reported Thursday, the Obama administration is asking Congress to uncork about $41 million from prescription drug and biosimilar user fees collected from the rebooted PDUFA V program. The move would lift a cap on use of the fees, and the agency could access $36 million from the PDUFA program for the balance of the fiscal year if Congress spares the user-fee program from the effects of sequestration.

Any interruption to reviews of medical products results in a major downer for drugmakers, and the industry-paid user fees, of course, provide invaluable funding to ensure that the agency has resources to conduct reviews on schedule. Yet the sizable cuts in store for the NIH--the biggest funder of medical research in the U.S.--hurt researchers and, down the road, are expected slow scientific discoveries that pharma groups rely on to feed their R&D pipelines. In an analysis released today, life sciences-focused financial services firm Burrill & Company estimates that the FDA could lose $318 million in funding and cut hundreds of jobs to adjust to the lower funding level.

Even before the threat of sequestration, the research community was up in arms about the limited NIH funds for young scientists and other woes. Now the research funder faces $2.4 billion in budget cuts in fiscal year 2013, including an estimated $400 million haircut from the National Cancer Institute's spending allowance, potentially siphoning translational research dollars that have ushered discoveries from the lab to the clinic for biotech outfits, according to analysis from GlobalData.

The pharma industry has just begun to climb out from the worst of the patent cliff, and deep cuts in seminal research funding could lead to another cliff of sorts if the stream of innovation from universities and research centers slows to a trickle at some point in the future.

As Sanofi ($SNY) R&D boss and former NIH chief Elias Zerhouni told The Washington Postrecently, the sudden blow of budget cuts "would be a disaster for research, which is not an activity that you can turn on and off from year to year. It's an activity that takes time."

Now attention turns to the ability of Democrats and Republicans to strike a deal on a budget that would fuel government operations beyond the end of the temporary spending plan that expires March 27, BioCentury reported, noting that failure to pass a new budget could lead to a shutdown of government.

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